All debtors who are considering bankruptcy must calculate their current monthly income beforehand which will help the bankruptcy court determine whether a debtor qualifies for Chapter 7 bankruptcy or if they need to take the means test to determine their ability to repay their debts. Current monthly income is a term that is deceptive because it does not necessarily reflect the income a debtor is earning at the time of his/her bankruptcy filing. Current monthly income is the average income earned/received by the debtor (on a monthly basis) in the six months PRIOR to filing bankruptcy. For example, even if a debtor lost his/her job a month before filing bankruptcy, his/her current monthly income figures would not accurately reflect that change.
It’s important to note that current monthly income includes all income a debtor received in the prior 6 months before filing bankruptcy whether or not the debtor needs to pay taxes on that money. Current monthly income does not include social security income. All income claims must be supported by a pay stub or some other proof of income in the case of self-employed debtors filing bankruptcy.